First Abu Dhabi Bank (FAB), the largest bank in the United Arab Emirates (UAE), has announced the issuance of $100 million in three-year floating rate term notes—the first digitally native bond in the Middle East and North Africa (MENA) region.
Listed on the Abu Dhabi Securities Exchange (ADX), the notes are issued through HSBC’s digital assets platform, Orion, and are connected to Hong Kong’s Central Moneymarkets Unit (CMU), as well as Euroclear and Clearstream. HSBC also acted as sole global coordinator, lead manager, and bookrunner on the transaction.
The floating rate notes carry a coupon of 5.1253% with quarterly payments. Primary settlement takes place on July 8, with maturity on July 8, 2028.
Digitally native bonds use distributed ledger technology (DLT) to represent ownership—such as legal title or beneficial interest—in digital form. Similar instruments have been issued in Europe, Singapore, and Hong Kong by financial institutions, corporates, governments, and supranational entities.
Defining moment
ADX group CEO Abdulla Salem Alnuaimi called the issuance a “defining moment” in the exchange’s digital transformation. He said ADX ensured the bond’s integration with existing post-trade infrastructure and alignment with global standards.
“This initiative not only expands access to institutional-grade digital instruments, but also lays the foundation for a broader class of tokenised assets—including green bonds, sukuk, and real estate-linked products,” he said.
ADX is the UAE’s largest exchange and the second largest in the MENA region after Saudi Arabia’s Tadawul.
Lars Kramer, group chief financial officer at FAB, added: “By transforming traditional settlement processes into seamless digital workflows, we are not only advancing FAB’s digital transformation but also helping investors navigate the global digital assets landscape.”
Middle East–Hong Kong connection
John O’Neill, group head of digital assets and currencies at HSBC, told FinanceAsia that the issuance reflects growing demand for digital assets across both the Middle East and Asia.
Global investors can access the bond through accounts held with CMU, Euroclear and Clearstream, or via eligible custodians using HSBC’s platform, according to a July 3 media release.
The deal arrives as capital markets in the Middle East and Hong Kong deepen cross-border collaboration. In May, the Hong Kong Stock Exchange (HKEX) co-hosted the second Capital Markets Forum Hong Kong with Saudi Tadawul Group. HKEX CEO Bonnie Chan said the exchange aims to capitalise on rising deal flow between China, Asia and the Middle East.
HKEX also listed Asia’s first ETF tracking Saudi Arabia’s government sukuks in May, following the debut of a Saudi Arabia equities ETF in 2023.
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